China has enough grain reserves to keep prices stable

China has sufficient grain reserves to keep domestic prices basically stable this year, as even if prices start to rise they can be controlled, the Chinese Grain Network Web site cited a senior grain official as saying Friday.

China's grain ending stocks have been stable in recent years, and the ratio of stocks to consumption is well above the global safety level of 17-18 percent, Zeng Liying, deputy chief of the State Administration of Grain, was cited as saying during a grain forum.

The government would also start buying under its minimum purchase prices program if grain prices fell below the minimum prices set by the government after this year's harvest, she said.

The Web site also cited an official from China Grain Reserves Corp. as saying that China's grain prices are expected to rise slightly this year due to the government's purchases and increases in minimum purchase prices.

The government will support a "mild increase" in grain prices this year to protect farmers' interests, Chang Shaoping, deputy chief of the corporation's Information Department, said at the same forum, according to the report.

As the government controls a large part of the domestic grain supply through purchases, government policies will be key in deciding China's grain prices this year.

CGN is controlled by China Grain Reserves Corp.